Stratasys Securities Class Action
A securities class action suit was recently filed on behalf of Stratasys, Ltd. shareholders.
Based in Eden Prairie, Minnesota, Stratasys, Ltd. manufactures three-dimensional printers. The company touts itself as being a leading provider of additive manufacturing solutions.
Rigrodsky & Long suit
Rigrodsky & Long, P.A. announced Feb. 9, 2015, that a lawsuit had been brought forth to represent all entities or individuals who bought the company’s common stock between May 9, 2014, and Feb. 2, 2015.
This securities class action suit, filed in the U.S. District Court for the District of Minnesota, named the three-dimensional printer manufacturer, along with certain officers, as defendants. The defendants allegedly failed to disclose key facts, and also made materially false and misleading statements, pertaining to the operations, business and prospects of the company.
Pomerantz LLP claim
On Feb. 9, 2015, Pomerantz LLP announced it had filed a similar lawsuit, which named Stratasys and certain officers. This suit was brought forth to represent all entities and individuals who purchased the company’s securities between May 9, 2014, and Feb. 2, 2015, and was filed in the U.S. District Court, Southern District of New York.
This lawsuit claimed that throughout the class period, defendants provided statements about the business, operational and compliance policies of the company that were materially false and misleading. The aforementioned defendants consistently made positive statements about MarketBot and its products, according to the suit.
“The defendants allegedly failed to disclose key facts.”
The Pomerantz lawsuit cited two specific statements the company made on May 9, 2014. That day, the three-dimensional printer manufacturer claimed that “MakerBot branded products and services contributed $20.6 million to first quarter revenue, a 79 percent increase over the revenue that MakerBot generated as an independent company during the first quarter of 2013.”
In addition, the company emphasized on May 9, 2014, that it had started “shipping the new MakerBot Replicator 3D Printer, and announced the availability of the MakerBot Replicator Mini Compact 3D Printer and MakerBot Replicator Z18 3D Printer for preorder, with shipping expected before the end of the second quarter.”
Rigrodsky & Long claims
The securities class action suit filed by Rigrodsky & Long provided additional details on its allegations. According to this legal action, the defendants failed to reveal several key matters to the investing public.
Allegedly, these defendants did not disclose that during the period, the introduction of new products and distribution channels helped fuel the share of revenue provided by MakerBot branded products. Also, they allegedly failed to reveal that products and services falling under the MarketBot brand were enjoying little or no increase in demand during the class period.
Consumer demand and the company’s ability to increase the distribution of MakerBot branded products were hindered by defects in new products that the defendants knew about, but allegedly failed to reveal.
“Relevant accounting principles obligated the company to inspect several matters.”
As a result of the aforementioned, relevant accounting principles obligated the company to inspect several matters. More specifically, the maker of three-dimensional printers was required to test whether its financial performance and outlook for 2014 and 2015 would suffer as a result of technical problems afflicting its MakerBot product line. In addition, Stratasys was obligated to test whether goodwill regarding its MakerBot acquisition had been hampered.
The statements defendants made about the manufacturer’s expected earnings and financial performance were false and misleading and also lacked a reasonable basis because of all the aforementioned developments. In addition, company stock obtained artificially inflated values during the class period because of defendants’ allegedly false and misleading statements.
Revenue warning
On Feb. 2, 2015, Stratasys provided preliminary results for fiscal year 2014 and updated guidance for the following fiscal year. The company stated that it expected to report top-line results between $748 million and $750 million for that particular fiscal year, below the prior guidance of $750 million to $770 million.
The manufacturer revealed a decline in MakerBot sales, announcing it was taking a substantial impairment charge and warned that its earnings per share would lag the figures Stratasys had mentioned repeatedly during the class period.
In addition, the company revealed that during the fourth quarter of fiscal 2014, revenue for MarketBot increased only 7 percent from the same time the year before, lagging the pace of growth enjoyed in previous quarters.
When markets discovered all this negative news, they reacted by pushing shares of Stratasys down sharply. These units of ownership fell more than 28 percent to finish the session on Feb. 3, 2015, at $57.36 each.
What investors can do
Eligible investors have the right to serve as lead plaintiff in either of these securities class action suits. Pomerantz LLP informed shareholders that if they wish to act in this particular role, they can move the court until April 6, 2015. Rigrodsky & Long, P.A. also notified investors that they can take this route, and provided the exact same timeline for moving the court.